Chase Bank Accused of Withholding Interest Payments on Mortgage Escrow Accounts

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A proposed class action has been filed in California against JP Morgan Chase Bank N.A. that alleges the defendant withheld required interest payments on mortgage borrowers’ escrow account funds. The complaint explains that the defendant requires consumers who have taken out mortgages to deposit money into an escrow account that the bank will use to pay for the property’s tax and insurance once they become due. The funds in the account, paid in advance, belong to the borrower and accrue interest while being held in the escrow account, the suit notes. California law mandates that banks pay borrowers “a minimum of 2% simple interest” on their escrow funds, but the defendant allegedly withholds these required payments, “thereby enriching itself on the free use of borrowers’ escrow funds that Defendant earns interest on.”